Is timing more important than speed for grocery delivery?

Discussion
Photo: DoorDash
Apr 28, 2022

A recent university study finds that at least for the grocery space, precision (the duration of the delivery window) and flexibility (ability to pick the times of the day and days of the week for delivery) can be as or more important than speed for home delivery.

“The customer must be present to receive perishable goods from the retailer,” according to the study featured in MIT Sloan Management Review and led by researchers at The University of Porto in Portugal and of Chicago Booth School of Business. ”Attended home delivery requires the retailer and the customer to agree upon a delivery time slot that works for both parties.”

The study found online grocery shoppers:

  • Willing to wait 10.8 hours longer for a delivery if the delivery window is one hour shorter.
  • Willing to wait an additional 7.5 hours longer if the delivery can be received on a preferred day of the week.

The analysis also showed repeat customers are willing to pay more for the same delivery attributes compared with other shoppers. Moreover, customers with very large baskets are willing to pay double the delivery fee to improve delivery-window precision by one hour.

Recommendations from the study include investing in tools that track site navigation and online/offline purchases, analyzing customer-specific time-slot selection data to understand preferences, and utilizing predictive analytics to understand what delivery attributes drive loyalty and repeat purchases.

“Analytically minded retailers can craft delivery time slots that are unique to each customer based on revealed preferences,” says Nicole DeHoratius, adjunct professor of operations management at the University of Chicago Booth School of Business, in a press release. “I strongly encourage retailers to rethink their operations to optimize not only on speed but also the most appropriate combination of speed, precision, and flexibility.”

According to a consumer survey from Coresight Research from last fall, fast delivery was the sixth most-important factor when choosing a rapid delivery service (i.e., Gopuff, Gorillas, Getir, Jokr), cited by 40 percent. The top five were low or no delivery fee (61 percent), price of items (53 percent), in-stock availability (49 percent), product quality (45 percent) and product assortment (43 percent).

DISCUSSION QUESTIONS: Is optimizing delivery time slots more important than speed when it comes to grocery delivery? Has the grocery channel figured how to handle delivery with perishables?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"We (the industry) insist on training shoppers to want it faster and faster. If shoppers are telling us that is less important, let’s work on the more important stuff."
"Marketing departments have created this rush for shorter delivery lead times..."
"Speed is a race to the bottom, few things end up being that sensitive outside of medical care."

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18 Comments on "Is timing more important than speed for grocery delivery?"


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Neil Saunders
BrainTrust

Quite honestly, aside from a few occasions – when people run out of something while making dinner, or want a meal quickly – there is no widespread customer need to have groceries delivered in 10 minutes or some other ridiculously short window. The reason people use such services now is because they are relatively cheap (subsidized by companies that are deeply unprofitable), so it’s almost a free benefit. I also think that fast means control: you know when something is coming and can easily plan around it. This is important in grocery where perishable items mean you have to be present to receive delivery as goods can’t just sit outside in a box for hours on end. Better scheduling of longer term delivery times would help here. The UK is generally excellent at this with most grocers offering specific slots and time windows that you scheduled before placing your order. There is a lot of route planning and scheduling technology behind this, which is something U.S. retailers need to invest more in.

Dr. Stephen Needel
BrainTrust

Clearly optimizing time slots is more important than speed, except of course when Rocky Road ice cream is involved – that needs to be delivered immediately. We (the industry) insist on training shoppers to want it faster and faster. If shoppers are telling us that is less important, let’s work on the more important stuff.

David Naumann
BrainTrust

For online orders of perishables, frozen and refrigerated products, the delivery time is very important for consumers. The last thing consumers want is for temperature sensitive products to be sitting at their door for hours if they are delivered when they are not home. Customizing delivery times is definitely more important than speed of service for most online grocery orders and many consumers will pay a premium for preferred delivery windows.

Ken Morris
BrainTrust
I agree with the study results: timing beats speed. Who wants their ice cream delivered this morning when I’m at work? My biggest issue is precision in substitution. Some services are ridiculous in the way they do this. I have ordered 18 eggs and got nothing because they were out of stock on the 18-count cartons. Then last week, when my wife ordered a 16-ounce bottle of olive oil, they gave us one container with 12 ounces — and one with 4. And they weren’t even the same brand. The last thing a customer wants is to wait all day for an order only to discover that half of it is wrong. Anyway, the short-window delivery option might work for certain retailers. Phase one might be to charge a premium for short delivery windows. Phase two will be to offer it as a competitive advantage for free. Having MFCs and ghost kitchens close by will be key to hitting smaller and smaller delivery targets. Long story short, humans like to control their destinies. We’ve evolved… Read more »
Lucille DeHart
BrainTrust

The short answer is, it depends. The solution is not to choose either/or, but have the customer select their options: fastest delivery, scheduled delivery, appointment delivery. As always, the customer has the right answers.

Dave Bruno
BrainTrust

I know the market doesn’t agree with me (yet) but I continue to maintain that delivery fees, order accuracy, produce quality, and delivery within the specified time window – not the speed of delivery – will ultimately be the deciding factors for grocery delivery consumers. I am still amazed at the massive investments made in companies that offer ultrafast delivery options and I suspect those unicorn-hunting investors will be disappointed before too long. Flexible and reliable fulfilled delivery times – even if scheduled several hours later – are far more important to the vast majority of grocery shoppers than 20-minute deliveries. In the case of grocery delivery speed, I stand by my belief that the relentless hunt for unicorns has caused investors to lose sight of the old adage “Find a need and fill it.” I just don’t believe there is a significant need here.

Shep Hyken
BrainTrust

Providing delivery is a convenience customers will pay for. However when this convenience becomes inconvenient because of the timing of the delivery (or any other shortcomings or service failures), the customer can become frustrated. The result is the customer may look for other options, which could include offerings from competitors. So if a grocery store (or any other retailer) is going to offer delivery, just like any other service — do it right.

Lisa Goller
BrainTrust

As more people return to the office, coordinating grocery delivery with customers’ schedules outweighs speed.

Overall, delivery of perishables has improved with quality selections and careful shipping. Yet recent “shelflation” has increased food waste, as perishables don’t last as long in our fridge due to bigger supply chain disruptions.

David Spear
BrainTrust

Speedy delivery has spawned a whole new series of quick commerce companies that are doing their best to deliver a product to consumers in 15 minutes or less. Does this survey mean that speed alone doesn’t matter? No, of course it doesn’t mean that, but the customer is normally right in most cases and it will depend on what the customer deems most important for their occasion. My intuition is in alignment with the survey results: optimized time slots are more important than speed.

Ananda Chakravarty
BrainTrust

Absolutely. Delivery times matter more than how quickly customers receive their goods. The ability to receive something quickly is not always in line with the needs of the consumer – who seeks delivery for convenience. What matters more to most customers is that their pizza is piping hot when it arrives or their new fancy deck chair arrives before their in-laws. The actual speed doesn’t matter as much, so long as the customer objective is met. Perishables are an interesting case and, presently, delivery in this space is clearly not meeting customer needs more than in-store shopping, otherwise there would be a far more dramatic increase in e-commerce grocery and a rapid drop in BOPIS and in-store sales (which was the prediction years ago at the outset of e-commerce). Delivery is another way to meet grocery customer convenience, and grows more mature day by day.

Melissa Minkow
BrainTrust

Our Connected Retail Report revealed the same thing – consumers don’t really need speed that often, they really need the convenience of timing. If same-day delivery requires you to be tethered to your home, waiting for your items, it’s far less convenient than them arriving the next day at whatever time you know you’ll be home.

Scott Norris
Guest

Right — it’s like waiting for the Comcast guy or the plumber “between 9 and 3” — so you’ve lost a day of work at the office and you can’t get anything done at home.

Dick Seesel
BrainTrust

Timing matters more than speed, but having your order completed as placed (or with acceptable substitutes) trumps both; shortages continue to plague grocery shoppers long after the start of the pandemic. Getting your order delivered within an hour of placing it is an exercise in futility if half the items delivered are unwanted brands or (worse) total stock-outs. Stores that take a little extra time to get it right (and set realistic delivery times) will be rewarded by loyal customers.

Andrew Blatherwick
BrainTrust

I have long argued that most grocery purchases are not speed dependent. Who needs to have their weekly shop delivered in 30 minutes? Yes, there is a demand for fast food deliveries when you have an emergency or just fancy something you do not have, but that is the exception and not the norm. However what is critical for online grocery is that you can get the delivery when you want it to suit your lifestyle, work patterns or whatever. Also the certainty that the delivery will come when it is promised builds loyalty, confidence and repeat business. Marketing departments have created this rush for shorter delivery lead times, and it is time they refocused on the message that they want to build the brand on – reliability, certainty, great availability, service and of course great products and great prices.

Raj B. Shroff
BrainTrust

Yes, time accuracy is more important, have we not learned anything from the endless jokes about cable repair time windows? Speed is a race to the bottom, few things end up being that sensitive outside of medical care.

Patricia Vekich Waldron
Staff

Understanding needs, setting realistic expectations and continually communicating with customers about deliveries is more important than speed.

John Karolefski
BrainTrust

The short answer is YES. Optimizing delivery time slots is more important than speed when it comes to grocery delivery. Actually, the speed factor is getting to be a little absurd. Publix is launching 15-minute delivery in Miami. I am waiting for a competing grocer to announce 10-minute delivery in that marketplace. Once that is announced, I would advise another chain to build studio apartments for shoppers in the store’s back room. The attraction? Zero delivery time because shoppers live in the supermarket.

Brad Halverson
Guest

Grocery shoppers have for years wanted simply for their chosen store to deliver on the promise and claims they are making. (e.g. promises of one or more of the Big 6 motivations — quality, variety, customer service, convenience, EDLP/price, ad values).

For online ordering and delivery, this doesn’t change. Most shoppers will care first about the getting items they want, at the quality level they expect for the price they paid. They want what they ordered, to show up on time and for food to be packed properly kept, not broken.

Getting it right and on time will always be a more important driver than a 20 minute delivery or a 1 hour delivery.

wpDiscuz
Braintrust
"We (the industry) insist on training shoppers to want it faster and faster. If shoppers are telling us that is less important, let’s work on the more important stuff."
"Marketing departments have created this rush for shorter delivery lead times..."
"Speed is a race to the bottom, few things end up being that sensitive outside of medical care."

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